UPDATED: Malusi Gigaba meets with World Bank to discuss Eskom

JOHANNESBURG — During the recent mid-term budget presentation, Gigaba was widely quoted as saying that South Africa can’t afford nuclear, at least for the next five years. He practically side-stepped nuclear in his budget speech as well, indicating that nuclear is probably off the table for a while. However, what we now learn is that despite Gigaba’s apparent reluctance for nuclear energy, he has – just days later and behind the scenes – been talking to the World Bank and their discussions included Eskom and nuclear. UPDATE: However, the World Bank has since said it doesn’t fund nuclear projects while Gigaba’s office has also denied discussion nuclear funding options. – Gareth van Zyl

By Loni Prinsloo

(Bloomberg) – South African Finance Minister Malusi Gigaba met with representatives of the World Bank last week to discuss issues relating to Eskom Holdings SOC Ltd.Gigaba met with the bank to discuss the financing of the state-owned power utility’s Medupi project, his spokesman Mayihlome Tshwete said by phone on Wednesday.

Other state-owned enterprises including South African Airways, the national airline that is struggling to meet debt obligations, were also discussed at the meeting, according to two people who asked not to be identified because the information isn’t public. Another topic that came up was nuclear energy, said one of the people.

The talks didn’t include discussions on South Africa’s nuclear plan, Tshwete said.

World Bank representatives “regularly meet with officials in our client countries to discuss the implementation of ongoing projects, and that was the focus of the recent dialogue in South Africa,” the World Bank said in an emailed reply to questions. The organization as a matter of global policy does not finance nuclear projects, it said.

The World Bank granted Eskom a $3.75 billion loan in 2010 to help fund expansions. Of the total, $3.05 billion was for the 4,800-megawatt Medupi plant, one of two large new coal-fired power projects that have run over budget and are years behind schedule.

However, a World Bank inspection panel in 2012 found instances of non-compliance in its award of the loan. The impacts and risks for other local water users weren’t properly considered and the project would place strain on water resources in an area already suffering from scarcity, it said at the time.

Eskom last year began a process to add 9,600 megawatts of nuclear power capacity beyond its single existing plant by issuing a request for information from vendors. The procurement process stalled in April after a provincial court ruled that the government didn’t follow the correct procedure in pursuing the nuclear program.

Gigaba said Oct. 26 that South Africa can’t afford to build new reactors for at least five years and that it doesn’t need more baseload, or continuous, power capacity. Nuclear still remains a part of the energy plan and the government will look at it as an option when needed and when it can afford it, he said.